The Table Gives Marginal Product Data for Resources a and B

question 272

Multiple Choice

The table gives marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Assuming the prices of resources a and b are $10 and $20 respectively, when the firm hires the profit-maximizing combination of resources, its economic profit will be

• A)$140.
• B)$222.
• C)$117.
• D)$82.

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Definitions:

Type II Error

A statistical error that occurs when a null hypothesis is not rejected when it is in fact false.

Null Hypothesis

A statement of no effect or no difference, used as a default assumption in statistical hypothesis testing.

T Distribution

A probability distribution used in statistical analysis for small sample sizes, shaped similarly to a normal distribution but with thicker tails.

Standard Normal Distribution

A normal distribution with a mean of 0 and a standard deviation of 1.